If a Remax franchisee obtains the recommended additional insurance policies, what entities must be named as additional insureds?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
We recommend that you obtain and maintain media liability insurance, and employment practices liability insurance, and that you consult with an insurance advisor to determine the level of coverage that would be best for your Office. Where available, such additional insurance policies shall name REMAX Regional, RE/MAX Holdings, Inc. and REMAX, LLC (and other Related Parties that we may designate, as well as their respective officers, directors, and employees) as additional insureds, provide coverage to REMAX Regional, RE/MAX Holdings, Inc. and REMAX, LLC on a primary and noncontributory basis, and contain a waiver by the insurance carrier of all subrogation rights against REMAX Regional, RE/MAX Holdings, Inc., REMAX, LLC and other parties covered by the insurance. You should also consult with an insurance advisor regarding whether there are any additional insurance policies that you should obtain.
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, if a franchisee obtains the recommended additional insurance policies, REMAX Regional, RE/MAX Holdings, Inc. and REMAX, LLC (and other Related Parties that Remax may designate, as well as their respective officers, directors, and employees) must be named as additional insureds. These additional insurance policies should also provide coverage to REMAX Regional, RE/MAX Holdings, Inc. and REMAX, LLC on a primary and noncontributory basis. Additionally, the policies must contain a waiver by the insurance carrier of all subrogation rights against REMAX Regional, RE/MAX Holdings, Inc., REMAX, LLC and other parties covered by the insurance.
This requirement ensures that Remax and its related entities are protected from potential liabilities arising from the franchisee's operations. By being named as additional insureds, these entities can directly benefit from the insurance coverage, reducing their financial risk in case of a claim. The primary and noncontributory basis clause further strengthens this protection by ensuring that Remax's coverage is prioritized over any other insurance policies they may have.
The waiver of subrogation rights prevents the insurance carrier from pursuing claims against Remax and its related parties, even if their actions contributed to the loss. This provision offers an additional layer of security, shielding Remax from potential legal action by the insurance company. Franchisees should consult with an insurance advisor to ensure they obtain the appropriate level of coverage and that all required entities are correctly named as additional insureds on the policies.
It is important for prospective Remax franchisees to understand these insurance requirements and factor the costs of these policies into their financial planning. Failure to comply with these requirements could result in a breach of the franchise agreement and potential termination.